The unintended consequences of incentive programs in schools

For months now—since learning about a project that was rewarding students who earned good grades with cold hard cash and limo rides—I’ve been mentally wrestling with the kinds of external incentive programs that are becoming more and more popular in our schools.

And while I’ve never been a real supporter of incentivizing any kind of learning, I’ve never had enough tangible evidence and/or research to take an intelligent stand for or against formal incentive programs until today.

You see, I just finished poking through a report titled A Fine is a Price—spotlighted in Clay Shirky’s newest book, Cognitive Surplus—that I believe carries real consequences for schools that are thinking about implementing external incentive programs.

Interested in understanding more about how external consequences and rewards influence human behaviors, Uri Gneezy and Aldo Rustichini decided to study 10 day care centers in the Israeli city of Haifa.

Specifically, they tracked the number of times that parents picked their children up late each week. What they discovered when they first arrived in Haifa was that the number of late pickups was relatively low—7 or 8 per center—even though there were no tangible consequences (read: fines) for tardy parents.

Then, Gneezy and Rustichini had 6 of the centers institute a fine to be automatically applied to the bills of parents who were more than 10 minutes late. The remaining 4 centers continuted to operate with no tangible consequence at all for late arriving parents.

What they discovered after three months of tracking patterns of parent pickups surprised me.

In the centers that began automatically fining parents, the number of late pickups nearly tripled—rising from 7-8 per week to nearly 20 per week—while the number of late pickups in the centers with no consequences for late arrivals remained unchanged.

Worse yet, even after fines were discontinued, the new patterns of late pickups remained the same. Centers where parents were charged every time that they were late continued to see nearly 20 late pickups every week while the number of late pickups in centers that had never introduced a fine hovered between 7 and 8.

Crazy, isn’t it?

Why would fines designed to discourage parents from picking their children up late have the exact opposite effect—even months after the fine policy was revoked? And what does this mean for schools considering incentive-based rewards programs?

Here are some lessons that I think apply:

Human relationships are best governed by social norms.

The first lesson to be learned from Gneezy and Rustichini’s study is that human relationships—including those between teachers and students—are best governed by social norms.

Think about the parents in the Haifa day care centers that had no fines for late pickups. Why did they ever bother to arrive on time to get their children? We all lead busy lives. We get caught up at work, we have errands to run, we have piles of email to answer and we have piles of bills to pay.

With no incentive to be on time, you’d think that more parents would show up late to get their kids, right?

The point is that there was an incredibly powerful incentive to arrive on time. Parents in any day care center develop social relationships with the adults that care for their children.

They know that if they are late, they interrupt the equally busy lives of the day care center professionals that they come to know and appreciate. Socially, it’s just plain unacceptable—even offensive—to let down the people that you care about, right?

Those social motivations are what kept parents in centers with no fines arriving on time.

Don’t the same kinds of motivations drive the students in our classrooms? Aren’t there kids every single year that you can reach simply because they don’t want to let you down?

Sure there are.

The most effective teachers rely on relationships as levers to encourage certain behaviors all the time, and for most of our students—like most of the parents involved in Rustichini’s study—keeping teachers and parents happy is a motivator that really matters.

Introducing market-based incentives erases the power of social norms and human relationships.

The second lesson to be learned from Gneezy and Rustichini’s study is that once you introduce market based incentives—fines for arriving late to pick up your child from day care, cash for earning good grades in school, prizes for reading a certain number of books every year—the power that social norms have in human relationships are erased.

In Haifa, parents in centers that instituted fines went from seeing their children’s care providers as people that they cared about and respected to just another cog in a market driven world.

Arriving on time went from a decision based on social norms—I’ve got to get there because Mary is waiting to get home to her own children and being late isn’t fair to her—to a decision based on market norms—I’ve got a ton to do today, so I’m going to take the Center’s fine and get caught up here at the office.

As Shirky explains, “The fine turned day care from a shared enterprise into a simple fee-for-service transaction, allowing the parents to regard the workers’ time as a commodity, and a cheap one at that” (Kindle Location 1708-1712).

For teachers and schools, the implications of this shift are super significant.

We literally depend on social norms in order to manage our schools and our classrooms. Motivating students to do anything—finishing assignments, tackling tough new concepts, behaving, treating peers with respect—is almost always dependent on the strength of the relationships that we develop with our kids.

In schools that rely on incentive programs, however, those relationships become meaningless.

Students, too, move from decisions based on social norms—I’m going to get all of my missing work turned in because Mr. Ferriter believes in me and I don’t want to let him down—to decisions based on market norms—I don’t really care about the prizes that I can win by getting all my work turned in, so I’m not going to do it.

Frightening, huh?

Basically, if you’re planning on implementing any kinds of incentive programs in your building, you’re taking away the influence that your teachers once had over your students.

That means you’d better have a never-ending pile of really good prizes if you’re hoping to see meaningful changes in student behaviors.

Perhaps the most important lesson to be learned from Gneezy and Rustichini’s study is that market-based incentives will fundamentally—and permanently—change the nature of human relationships in organizations once governed by social norms.

Remember that in Haifa, the number of late arriving parents in centers that experimented with fines never returned to normal. Even months after the practice of fining late arriving parents had been rescinded, these centers still had nearly triple the number of tardy pickups as the centers that had never experimented with fines to begin with.

As Shirky explains, “The experiment showed that market transactions are not merely additive to other human motivations; they alter them by their mere presence” (Kindle Location 1717-21).

That means schools considering incentive programs had better be fully convinced that the programs they’re embracing are going to have long-lasting and significant impacts on student behaviors and academic performance before deciding to implement them because there is no turning back.

Once the social norms that have traditionally governed the work of teachers and students in the schoolhouse are replaced by market-based incentive programs they are gone forever.

You can’t just try an incentive program, discover that it doesn’t have the desired results, and go back to business as usual.

Never again will students invest effort because they care about what a teacher thinks. Instead, they’ll begin making calculated decisions about behavior and/or performance based on the quality of the prize that you’re offering.

Is that a risk you’re willing to take?

I’ve got to say that incentive programs frighten me because schools seem to adopt them without careful consideration of just how those programs are going to change the nature of relationships in the schoolhouse.

And while incentive programs might result in a few short-term wins—students initially responding to exciting new chances to be rewarded—short-term wins in education are rarely evidence of lasting, significant change.

Don’t get me wrong: I know that motivation is a huge factor in student success. Motivation is a huge factor in any choices made by humans.

But based on Gneezy and Rustichini’s study, it sure seems that motivation programs based on market norms in inherently human and social organizations like schools are going to have long-lasting consequences that do more harm than they do good.